Moody's cuts three Ukrainian cities

Moody's Investors Service said it downgraded the foreign- and local-currency issuer ratings of the City of Kyiv, City of Kharkiv and City of Berdyansk to B2 from B1.

The agency downgraded Kyiv's foreign-currency debt rating and Berdyansk's local-currency debt rating to B2 from B1, and Berdyansk's national scale issuer and debt ratings to A3.ua from Aa3.ua.

The outlook is negative. The action concludes the review for downgrade that began on Feb. 26.

"The rating action reflects a further deterioration in the creditworthiness of Ukrainian municipalities resulting from the ongoing economic recession in Ukraine as well as domestic market dislocation," Alexander Proklov, a Moody's Analyst, said in a statement.

"Moody's believes the combination of tax revenue shortage, weak liquidity profiles and strictly limited access to the financial market exerts significant pressure on the credit profiles of these three Ukrainian cities," Proklov noted.

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